Legal Analysis: ACCC v TPG Internet Pty Ltd Case Study Solution

This case study analyzes the legal proceedings of ACCC v TPG Internet Pty Ltd, focusing on the issue of misleading advertising. The case involved TPG's advertisements for unlimited internet services, which were found to be deceptive due to hidden costs and setup fees not disclosed in the initial advertisements. The analysis covers the decisions of the Federal Court (Primary Judge and Full Court) and the High Court of Australia. The Primary Judge upheld the ACCC's claim, imposing a penalty, while the Full Court overturned this decision. However, the High Court ultimately sided with the ACCC, overturning the Full Court's decision and imposing a penalty of $2 million on TPG. The reasoning behind each court's decision is examined, highlighting the application of consumer law, the Trade Practices Act, and the principles of misleading and deceptive conduct. The case underscores the importance of clear and transparent advertising practices, particularly in the context of bundled services and hidden charges.

Running Head: Law 1
Law

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Introduction:
On 12th December 2013, High court provides the decision in case ACCC v TPG Internet Pty Ltd.
In this case, company was represented by the Truman Hoyle from the commencement of the
case. Firstly application was filed by the Australian Competition and Consumer Commission
(ACCC) in the Federal Court for getting injunction on urgent basis, and this application was
successfully defended in 2010 through the hearing before the Murphy J. Later, TPG file
successful appeal to the Full Federal Court, and decision of the Full Federal Court was
overturned by High Court in the appeal of ACCC.
This paper states, decision made by all three Courts and their reasoning. Subsequently paper is
concluded with brief conclusion.
Facts of the case:
During the period of 2010 and 2011, a multi-media advertisement campaign was conducted by
the TPG, and advertisement published by the company reflects that company provide unlimited
ADSL2+ service only for $29.99 per month. In actual, consumers need to bundle these internet
services with the telephone connection of their home for $30 per month. Company also charged
additional $149.95 as set-up fee and telephone charges. It must be noted that all these additional
cost were not disclosed by the company in their advertisement, and these cost were considered as
hidden additional cost.
ACCC file claim against the TPG that advertisement published by TPG was deceptive and
misleading nature, as it contravenes section 52 and 53 of the Trade Practice Act and also section
18 and 29 of the Australian Consumer law. In this case, claim of ACCC was upheld by the
primary judge and primary judge imposed pecuniary penalty of $2 million. Appeal was filed by
the TPG against this decision of primary Judge to the to the Full Court, and Full court set aside

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the decision of the Primary judge and reduce the penalty order up to $50000. ACCC file appeal
to the High Court against the decision of the Full Court, and High Court set aside the decision of
Full Court (battersby, 2013).
Reasoning and decision of all three Courts:
Primary Judge:
Primary Judge upheld the application made by ACCC against the TPG, and also imposed
pecuniary penalty on TPG of $2 million. Three perspectives were considered by the primary
judge while deciding this case, and all these three perspectives are stated below:
 Bundling- Primary judge stated that it was the primary obligation of the company to
clarify the effect of bundling in their advertisement. Judge further stated, company was
also obliged to mention the exact amount of the services charged by the company without
misleading the consumer. In this company charged hidden cost from their clients after
consumer opt for services. Consumers were misled by the TPG, because company
mention wrong amount in the advertisement for the internet services. Primary judge
clarify the targeted audience in this case, and held that were those people who does not
possess high level of knowledge related to the broadband services or those also who use
the internet services for the first time (Federal Court of Australia, 2012).
 Setup Fee- in this context primary judge held, generally setup fee was charged from
those consumers who opts the services of the company for less two periods, and company
must provide information related to this cost to the consumer before providing the
services. In this case, setup fee was not stated by the company in the advertisement, and
because of this consumers assumed that company does not charge any setup fee.

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Advertisement published by the company only state $29.99 as internet charges which
clearly misled the consumers about the charges of the internet services.
 Single price- for single price primary judge stated, it was necessary for the company to
mention final price in the advertisement, and such price must be calculated after
considering all the inclusions. In this, TPG does not stated final price in the advertisement
related to the internet connection, rather company mention lowest cost in the
advertisement which misled the consumers and after that company add additional
charges. Therefore, Conduct of the company was considered as misleading and deceptive.
Full Court:
In this case, Full Court does not persuade that conclusions of primary Judge were wrong related
to the initial advertisement on television. Full Court stated, conclusion made by primary judge in
respect of section 53C (1) (c) does not contain any appealable error. Full Court further stated that
revised television advertisement issued by TPG, initial and revised advertisements on radio,
initial and revised advertisements on newspaper, initial and revised online advertisements and
public transport advertisements were not misled the consumers.
Conclusion of the full Court was different from the primary judge related to the important
message of the advertisement which state whether published advertisement was misleading the
consumers. For this purpose, full Court adopted the principle introduced by Gibbs CJ in case law
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd. Gibs CJ stated that it was not right to
consider only the words of complaint conduct, and ignore other words which gave meaning to
the particular words. Full Court further stated, consumers to whom this advertisement was
directed must have some familiarity with the market for the provision of broadband services, and

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they know very well that these services are offered for sale either bundled or standalone (Federal
Court of Australia, 2012).
High Court:
Majority number of judges allowed the appeal made by ACCC against the decision of the Full
Court of the federal Court of Australia. High Court stated that TPG was engaged in the conduct
which was misleading and deceptive in nature under the provisions of Trade Practice Act and
schedule 2 of Australian Consumer law. While providing their decision High Court consider
various important terms and also provide various important statement of principles. Some of
these Principles are stated below:
 High Court stated that target audience does not pay close attention to the advertisement
and it only considers the general thrust.
 Attention in respect of the advertisement by the ordinary person can be considered as
perfunctory, and it was not possible to consider the failure of consumer to take reasonable
care of their interest.
 High Court further stated that high chances of error were present in this case, and exact
link was present in the advertisement and the error on the part of the consumer.
 It was not possible to cure the earlier breach through subsequent conduct.
High court further stated, Full Court wrongly applied the principles of PUXU case in this case,
because in PUXU case company was selling the furniture which was possible to check before the
purchase, but in this case company was providing the internet services and it was not possible to
check the internet services before purchasing. Therefore, principle of PUXU case was not
applied in this case (High Court, 2013).

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Conclusion:
In this case, matter was decided by three Court and while deciding the matter all three Courts
provide different reasons for their decision. Lastly, High Court overturned the decision of full
Court and imposed penalty of $2million on the company.

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References:
Battersby, M. (2013). Advertising and the ACL: Fine print couldn't save TPG Internet in the
High Court. Viewed at: https://www.claytonutz.com/knowledge/2013/december/advertising-and-
the-acl-fine-print-couldn-t-save-tpg-internet-in-the-high-court. Accessed on 16th September
2017.
Federal Court of Australia, (2012). Australian Competition and Consumer Commission v TPG
Internet Pty Ltd (No 2) [2012] FCA 629 (15 June 2012). Viewed at:
http://posh.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2012/629.html. Accessed on 16th
September 2017.
Federal Court of Australia, (2012). TPG Internet Pty Ltd v Australian Competition and
Consumer Commission [2012] FCAFC 190 (20 December 2012). Viewed at:
http://www6.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC/2012/190.html. Accessed on
16th September 2017.
High Court, (2013). Australian competition and consumer commission v TPG internet Pty ltd
(m98/2013). Viewed at: http://www.hcourt.gov.au/assets/cases/m98-2013/M98-2013.pdf.
Accessed on 16th September 2017.
Trade Practices Act 1974- Section 52.
Trade Practices Act 1974- Section 53.